Pay: the cap doesn't fit

Labour’s stunning result in the general election has changed the mood in Britain, writes Mark L Thomas. The new found confidence of workers to challenge Tory rule needs to translate into action.

Public sector pay has moved to the centre of political debate. This poses a pivotal question — will the new confidence inside the left and the wider labour movement move beyond the ballot box and the Labour Party and into an increased level of struggle in the workplace?

A public sector pay cap has been in place for seven years, though pay rises were hardly generous before that under Labour. In the first two years (2011–13) public sector pay was simply frozen for all but the lowest earners. Then from 2013 pay rises were capped at 1 percent, with the government announcing last year that this will continue to 2019–20.

The impact has been deep. The Resolution Foundation estimates that if the government got away with its original plan, by 2019–20 workers in education, health, social work and public administration would have suffered a decade and a half of lost pay growth.

But the feeling that enough is enough and that it is now possible to challenge the pay cap is due to the altered political situation and not simply the cumulative economic pain. If Labour had been trounced in June the mood over pay would be very different with fatalism probably prevailing.

But 8 June changed everything. Labour’s stunning advance on an anti-austerity platform and the loss of the government’s parliamentary majority deeply shook the Tories.

And the confidence that can come from feeling that the leader of the opposition will defend your action from attacks from the right rather than concede, or worse echo them, and moreover can win the public debate, is a huge boost for public sector workers who have often been vilified as undeserving.

The election also was a deafeningly clear signal to the Tories that simply carrying on with austerity in the old way would carry a high price for a weakened government facing the immense challenges of Brexit.

To rub salt into the wounds, just as some Tories including even some members of the cabinet started to speculate that the pay cap would have to go, the Tories shook their very own “magic money tree” to find £1 billion to draw the DUP into a confidence and supply arrangements to prop them up in office.

May has now effectively signalled that the pay cap will be reformed — and that “flexibility” will have to be introduced. But the Tories will attempt to do so on their own terms, conceding the least possible to the fewest groups of workers.

So the Tories announced that the police will get a 2 percent award for the current year while prison officers will get 1.7 percent. Both will be financed out of existing budgets and both are still below inflation and so remain pay cuts. And this is the best on offer so far.

But to paraphrase Alexis de Tocqueville on the pre-revolution French monarchy, the most dangerous moment for a bad government is when it begins to reform. Trying to stem eroding support by hinting at changes that raise expectations only to dash them can be a perilous course.

This has created a mood inside workplaces to do something about breaking the pay cap. This mood is having an impact at the top of the unions too. Unions covering local government workers and school support staff have put in a pay claim for 5 percent and a “living wage” of £8.45 an hour for the lowest paid.

Disproportionately

And 14 health unions have written directly to the chancellor, Phillip Hammond, bypassing their pay review body, to demand 3.9 percent plus an £800 flat rate on top for all health workers (which would disproportionately benefit the lowest paid).

Unison in health has been under pressure from the Royal College of Nursing which has been running a lively campaign against the pay cap including rallies and a threat to ballot for industrial action in some form if there is no movement by the budget on 22 November. If the RCN did take action it would be the first time in its 113 year history.

In both local government and health, there is an obvious question that must be raised in workplace meetings, at rallies and inside the unions’ structures — what will happen if the claim is not met? Activists cannot just wait and watch but have to start pushing for ballots if the claims are rejected. It means holding workplace meetings, pushing for local pay rallies and so on — some of which are already taking place such as the London pay march and rally on 17 October and using the Unite the Resistance pamphlet on pay for which John McDonnell, the shadow chancellor, has provided an introduction — effectively encouraging the argument for strikes.

And arguments for action over pay need to be raised inside the NEU (the newly merged NUT and ATL education union) and in the FBU where firefighters rejected their executive’s call to accept a 2 percent increase tied to strings around new work responsibilities.

Both the PCS civil service union and the college lecturers’ union UCU in further education have announced consultative ballots to prepare the way for strike ballots. At a fringe meeting organised by the Trade Union Co-Ordinating Group (which brings together a number of left-led unions) Mark Serwotka, PCS general secretary, argued that if there is no movement to end the pay cap in the November budget, every union should follow suit with at least a consultative ballot and build towards coordinated public sector strikes.

Serwotka at the same meeting also outlined three important red lines for the battle over the pay cap. Firstly, the pay cap must end for all public sector workers and all attempts at divide and rule where some workers get pay rises and others don’t must be resisted. Secondly, pay rises have to be fully funded by the government and not come out of existing austerity budgets, which can only mean more cuts to jobs and services. And thirdly, pay rises have to be above inflation.

Inflation is currently running at 2.9 percent on the government’s preferred Consumer Prices Index (CPI). But the Retail Price Index (RPI), which includes housing costs, is rather more realistic at 3.9 percent.

Labour, however, has indicated that it will only support rises in line with inflation, as Corbyn told Andrew Marr in a TV interview and Angela Rayner, the shadow education secretary, confirmed in an interview with the Today programme during Labour’s conference. Yet this doesn’t begin to reverse the years of falling real pay.

Historic

Any real pay fight should also be bold on low pay and raise the demand for a £10 per hour minimum wage — a key issue for the historic first strike by workers in two McDonald’s branches in Britain last month. This would help enthuse and draw young workers towards the organised labour movement and start to rebuild the unions among young workers especially — a pressing task.

The 2016 Trade Union Act requires ballots to achieve not just a majority for strike action but a minimum 50 percent turnout as well. For some groups of workers in “important public services” such as under-17 education, emergency health workers and firefighters there is an additional hurdle that 40 percent of all those balloted must vote to strike, regardless of how many actually vote.

Can these thresholds be beaten? Some union leaders are privately highly pessimistic. The danger is that their vision is restricted to political lobbying over the pay cap and to then wait for Labour to get elected.

But the current ballot by the CWU among over 100,000 postal workers in Royal Mail is providing the first large-scale test of the thresholds and a template of how it can be done.

Facing major attacks by a now privatised Royal Mail on pensions, working conditions — with pay also an issue — the union has led a serious campaign including good use of online communication with regular video updates and even a livestreamed “mass meeting” with general secretary Dave Ward and the lead post negotiator, Terry Pullinger, which got over 35,000 views. But crucially, in office after office the CWU has held round after round of workplace meetings to put the union’s case, challenge management’s propaganda and then to fight for the biggest Yes vote and turnout in the ballot. The CWU estimates over 1,000 of these meetings have taken place.

A “national day of gate meetings” to build the ballot was followed by a national “get the vote out day” with pictures on the union’s twitter feed (@CWUnews) of whole offices going to the post box to collectively send off their ballot papers. The union has also mobilised political support, hosting huge meetings with Jeremy Corbyn to promote Labour’s call for the renationalisation of the postal service.

Converting the bitterness and anger over pay into action faces higher legal hurdles than in the past. But a combination of connecting with the new political mood and a real lead in the unions that carries the argument for action into every workplace and demonstrates the union is up for serious a fight can maximise the potential to beat the ballot thresholds.

Major public sector strikes would strike a blow, perhaps even a fatal one, at the Tories’ propelling Corbyn into government sooner rather than later. But they would also begin to fashion a movement that goes beyond the ballot box and starts to build the only real counter power to check and challenge the inevitable onslaught a Corbyn government would face from the ruling class.

And a real fight over pay would have another indispensable impact. It would transform the debate about migrants in Britain. Every picket line and strike rally would direct anger at squeezed living standards towards those at the top, instead of mistakenly towards those at the bottom. It would create a powerful symbol of unity inside workplaces across the country between British born, EU migrant and non-EU migrant workers.